CME Group is launching a new, smaller sized option contracts on its global WTI Crude Oil benchmark. Micro WTI Crude Oil options will be 1/10th the size of the standard sized WTI Crude Oil option, providing market participants an efficient and cost-effective method to gain exposure to the crude oil market.
The Micro WTI Crude Oil options will derive their value from the underlying liquidity in the Micro WTI Crude Oil futures contract. Like the Micro WTI futures, the size of the Micro WTI Crude Oil options will be one hundred barrels.
Micro WTI Crude Oil options will have monthly and weekly listings allowing flexibility and greater precision for both short-and long-term risk management. The monthly options will be listed for the nearest twelve months and expire two days before the corresponding Micro WTI Crude Oil futures contract. Weekly options will be listed to expire on the nearest two Fridays.
Micro Crude Oil options will be financially settled and option premiums will be quoted in one cent per barrel tick increments, making a one tick move equivalent to one dollar.
For example, assume the premium for a Micro Crude Oil option is fifty cents, the cost of the option would be fifty dollars or fifty cents per barrel times one hundred barrels.
Trading of Micro Crude Oil options will be available on CME Globex, Sunday through Friday, nearly 24 hours a day.
Micro WTI Crude Oil options based on CME’s global oil benchmark allow participants a cost-effective and precise way to manage risk while diversifying their portfolio.
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